IN THE SUPREME COURT OF OHIO

DONNA BURNS, ET AL.

Plaintiffs/Appellees, . On Appeal from the CuyahogaCross-Appellants, County Court of Appeals,

Eighth Appellate DistrictV.

Court of AppealsSPITZER MANAGEMENT, INC., Case No. CA 10 094700ET AL.

Defendants/Appellants,

AND

ALAN SPITZER

Defendant/Cross-Appellee.

MEMORANDUM IN SUPPORT OF JURISDICTIONOF CROSS/APPELLEE, ALAN SPITZER

RONALD FREDERICK, #0063609RONALD FREDERICK & ASSOC. CO., L.P.A.55 Public Square, Suite 1300Cleveland, OH 44113-1971PH: (216) 781-3434FX: (216) 781-1749email: RonF e ClevelandConsumerLaw.comCounsel for PLAINTIFFS/CROSS-APPELLANTS,DONNA BURNS, ET AL.

D. CHRIS COOK, #0061073GIARDINI, COOK & NICOL, LLC520 Broadway, Third FloorLorain, OH 44052PH: (440) 246-2665FX: (440) 246-2670email: cooklaw@centurytel.netCounsel for DEFENDANT/CROSS-APPELLEE,ALAN SPITZER

TABLE OF CONTENTS

Paee

EXPLANATION OF WHY THIS CASE IS A CASE OF PUBLICOR GREAT GENERAL INTEREST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1

STATEMENT OF THE CASE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

STATEMENT OF PERTINENT FACTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

ARGUMENT IN SUPPORT OF PROPOSITION OF LAW

Proposition of Law : . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

WHERE A COMPLAINT BROUGHT PURSUANT TO THE CONSUMER SALESPRACTICES ACT FAILS TO ALLEGE THAT A CORPORATE OFFICER -DIRECTOR PERSONALLY COMMITTED AN ACT IN VIOLATION OF THESTATUTE, THE OFFICER - DIRECTOR CANNOT BE HELD INDIVIDUALLYLIABLE WITHOUT PIERCING THE CORPORATE VEIL

CONCLUSION ................................................................. 15

CERTIFICATE OF SERVICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

APPENDIX ........................................:............................16

Exhibit "A," Journal Entry, Cuyahoga County Court of Common Pleas, Case No. CV-06-606666, February 4, 2010

Exhibit "B," Decision and Journal Entry of the Eighth District Court of Appeals, CA 10094700, November 4, 2010 (The decision from which this appeal is brought)

i.

EXPLANATION OF WHY THIS CASE IS A CASE OF PUBLICOR GREAT GENERAL INTEREST

This case presents a matter of public and great general interest because the Eighth District

Appellate Court has significantly expanded individual liability in CSPA cases for corporate directors,

shareholders, and officers without the longstanding necessity of piercing the corporate veil or

alleging personal violations of the act.

Alan Spitzer seeks review of the Eighth District's interpretation as to individual liability of a

director for acts committed by the corporation. Specifically at issue is the applicability of the doctrine

of "piercing the corporate veil" in the context of a CSPA case where there is no allegation that the

director personally committed any of the acts complained of.

The fundamental rule of corporate law is that, shareholders, officers, and directors are not

liable for the acts or debts of a corporation. The exception to individual liability is embodied in the

doctrine of "piercing the corporate veil." It states that the veil of corporate immunity can be "pierced"

and individual shareholders, officers, and/or directors held liable for corporate misdeeds when it

would be unjust to allow them to hide behind the fiction of the corporate entity.'

The Eighth District Court of Appeals, however, determined that in a CSPA case, personal

liability may be premised solely upon the fact that an individual is a corporate director without the

previously required "piercing" analysis or without evidence that the individual personally committed

the acts complained of. As such, at least in CSPA cases, the decision eviscerates the long-standing

protections of corporate immunity to which directors - officers were previously entitled.

Belvedere Condominium Unit Owners' Assn. v. R.E. Roark Cos., Inc. (1993), 67Ohio St.3d 274, 287.

In essence, the Appellate Court has utilized the CSPA as a mechanism to circumvent the

common law doctrine of piercing the corporate veil, even in a case, as herein, where there is no

allegation that the director - officer ever personally committed any of the acts complained of.

The Appellate Court held that the trial court erred in granting summary judgment in favor of

Alan Spitzer because the corporate veil need not be pierced to hold him individually liable; rather he

needed only to have "personally directed" corporate acts.

This expanded concept of personal liability for a corporate officer is contrary to a string of

precedential cases that all stand for the proposition that for a corporate shareholder, director, or officer

to be personally liable in a CSPA case, without piercing the corporate veil, the individual "must deal

directly with the consumer."2

These decisions all follow this theory of liability and fiuther hold that "a shareholder who does

not directly engage in a CSPA violation could not be held personally liable for resulting injuries

unless the injured pg!y could pierce the corporate veil."3

Even more disturbing is that the Burns case herein conflicts directly with a prior Eighth

District case, Grayson v. Cadillac, as it expands upon the Grayson holding; a Ninth District case,

Inserra, and a Tenth District case, Charvat v. Farmers Insurance Columbus:4

2

4

Inserra v. JEM Building Corp. 2000 WL 1729480 (Ohio App. 9 Dist.) (Emphasis

added.) Relying on Sovel v. Richardson (Nov. 15, 1995), Summit App. No.

17150; Grayson v. Cadillac Builders, Inc. (Sept. 14, 1995), Cuyahoga App. No.

68551; State ex rel. Fisher v. Harper (1993), 83 Ohio App.3d 754; State ex rel.

Fisher v. American Courts, Inc. (July 21, 1994), Cuyahoga App. No. 65939.

Inserra, supra; See also: Carter, supra; Lawrence App. No. 99CA10. (Emphasis

added.)

178 Ohio App.3d 118 (2008).

2

In the Charvat case, the Tenth District found that the corporate officer accused of violating the

CSPA directed acts while "in his capacity as a corporate officer" and thus "could not be personally

liable."5 The court further found that the Plaintiff in Charvat, like the Plaintiffs herein, "attempt[ed]

to circumvent the usual legal route of piercing the corporate veil" and that the corporate officer would

not be personally liable for a CSPA violation where he "did not actively participate in the wrong

that resulted in liability."6

In the case at bar, the Appellate Court decision greatly affects shareholder, director, and

officer protections in the corporate arena as it erodes the very foundation upon which corporate

immunity is grounded. Further, it circumvents long-standing doctrine by creating a direct path to

individual liability despite no direct wrongdoing; improperly expands the reach of the CSPA in

derogation of the common law and the statute itself; and creates an untenable conflict between the

corporate protections provided for by statute and this new, expanded interpretation of the CSPA.

In addition, it will not be long before other claimants rely on this decision to circumvent the

necessity of piercing the corporate veil prior to creating individual, director or shareholder liability in

cases where there is no allegation that the individual actively participated in the alleged wrong!

Accordingly, this court must grant jurisdiction to hear this case and review the erroneous

decision of the Appellate Court.

STATEMENT OF THE CASE

On November 9, 2006 Appellees, Donna Bums and Marion McCloud

(hereinafter, collectively, "Bums"), filed a four-count, 37 paragraph complaint, alleging, inter alia,

violations of the Ohio CSPA, Fraud, Civil Conspiracy, and Punitive Damages. Burns also requested

class certification pursuant to Civ R. 23.

s

6

Id.

Id. (Emphasis added.)

3

Bums' Motion for Class Certification was eventually granted by the trial court on February 5,

2010. Spitzer filed its Notice of Appeal with the Eighth District Court of Appeals on February 19,

2010 asserting that the trial court abused its discretion by certifying the class. On November 4, 2010

the appellate court affirmed class certification. (Spitzer does not challenge the issue of class

certification in this Memorandum.)

In their complaint, Bums riamed two corporate entities, Spitzer Management, Inc. and Spitzer

Buick-Cadillac, Inc., (hereinafter, "Spitzer Management," and "Spitzer Buick," respectively) as

defendants. Alan Spitzer (hereinafter, "Mr. Spitzer") was also sued in his individual capacity as he is

a director of both corporations.

On January 19, 2007 Mr. Spitzer timely answered and filed a counter-claim. On June 20,

2007 Mr. Spitzer filed a motion for summary judgment. Summary judgment was granted in his favor

on February 4, 2010 whereby all claims against him in his individual and personal capacity were

dismissed.'

On February 26, 2010 Burns filed a Notice of Cross-Appeal to the Eighth District Court of

Appeals, appealing the trial court's decision to grant summary judgment in favor of Mr. Spitzer. The

issue was briefed and argued before that court. On November 4, 2010 the Appellate Court filed its

decision and reversed the judgment of the trial court finding a material issue of fact remaining as to

Mr. Spitzer's individual liability.8

This Motion For Jurisdiction goes to that element of the Appellate Court's decision.

8

Exhibit "A," Journal Entry, Cuyahoga County Court of Common Pleas, Case No.CV-06-606666, February 4, 2010 attached and incorporated herein.

Exhibit "B," Decision and Journal Entry of the Eighth District Court of Appeals,CA 10 094700, November 4, 2010 attached and incorporated herein. (Thedecision from which this appeal is brought.)

4

STATEMENT OF PERTINENT FACTS

A. BACKGROUND

This case involves a class of individuals who entered into vehicle purchase agreements with

Spitzer dealerships in which buyers agreement forms were utilized allocating a portion of the final

price as "dealer overhead." The amount of the dealer overhead was not pre-printed but handwritten

on the worksheet during negotiations and then printed on the actual buyer's agreement. The amount

varied with each transaction as it was negotiated on an individual basis.

Burns sought class certification on behalf of all consumers who paid any dealer overhead fee

as part of the total cost of their vehicle. They also sued Mr. Spitzer in his individual capacity alleging

that, as president and corporate director of the Spitzer entities, he directed employees to charge a fee

that he knew violated the CSPA.

Mr. Spitzer, in his individual capacity, filed for summary judgment asserting that Burns had

not alleged facts that would permit them to pierce the corporate veil and that he did not personally

commit a CSPA violation as he never participated in the sale or lease of vehicles. The trial court

agreed.

B. THE CORPORATE VEIL

The corporate structure of the Spitzer entities did not support a piercing of the corporate veil.

Spitzer Management is an independent, for profit corporation, established on October 13, 1955 with

its own charter/registration number, to wit: 250376. Spitzer Management has conducted business in

the State of Ohio for 52 years providing sales, legal, accounting, training, and marketing services to

various Spitzer entities. It has its own independent shareholders, to wit: Spitzer A-Team, LP; Randy

Spitzer; Kevin Spitzer; and Karen Csonka. Further, it has a separate Board of Directors, to wit: Alan

Spitzer, Anthony B. Giardini, Tom Bury, Debra Noska, and Joannie Hales. Finally, it has an

5

independent slate of officers, to wit: Alan Spitzer, President; Anthony B. Giardini, Executive Vice-

President/Asst. Secretary; and Tom Bury, Secretary/Treasurer.

Spitzer Management is properly capitalized, observes corporate formalities by conducting

meetings and keeping corporate records, files separate corporate tax returns, and has never been

insolvent.

Spitzer Buick is also an independent, for profit corporation, established on January 29, 1974

with its own charter/registration number, to wit: 449095.

Spitzer Buick has conducted business in the State of Ohio for 33 years. It sells, leases, and

services new and used automobiles. It, too, has its own independent shareholders, to wit: Spitzer A-

Team, LP; Randy Spitzer; Douglas Spitzer; Kevin Spitzer; and Karen Csonka. Further, it has a

separate Board of Directors, to wit: Alan Spitzer, Anthony B. Giardini, and Tom Bury. Finally, it has

an independent slate of officers, to wit: Alan Spitzer, President; Anthony B. Giardini, Asst. Secretary;

Tom Bury, Secretary, and Alan Yakich, Treasurer.

Spitzer Buick is properly capitalized, observes corporate formalities by conducting annual

meetings and record keeping, files separate tax returns, and has never been insolvent.

Unfortunately, the Spitzer Buick franchise was one of several hundred automobile dealerships

cancelled as part of General Motors bankruptcy filing in 2009. Spitzer Buick ceased operations in

June, 2010.

Regardless, Mr. Spitzer is but one of five directors and one of four officers of Spitzer

Management and Spitzer Buick. Included in the slate of shareholders, directors, and officers are other

Spitzer family members and all directors of the two corporate defendants have equal voting power.

Based on these facts, the trial court granted summary judgment in Mr. Spitzer's favor.

6

In granting summary judgment to him, the trial court followed Court's decision in Belvedere

Condominium Unit Owners' Assn. v. R. E. Roark Cos., Inc.9

The trial court noted that, "a fundamental rule of corporate liability is that normally,

shareholders, officers and directors are not liable for the debts of the corporation.,>lo An exception to

the general rule exists, however, where "the veil" of the corporation can be pierced and individual

shareholders held liable for corporate misdeeds when it would be unjust to allow the shareholders to

hide behind the fiction of the corporate entity. ' 1 Thus, courts will permit individual shareholder

liability only if the shareholder is indistinguishable from or the "alter ego" of the corporation itself.l2

C. MR. SPITZER DID NOT PERSONALLY OR DIRECTLY COMMIT THE ACTS

COMPLAINED OF

The trial court determined that Bums' argument that they need not pierce the corporate veil in

a CSPA claim in order to attach personal liability to Alan Spitzer, a corporate director, lacked merit.

The trial court reasoned that there was no evidence that Mr. Spitzer personally committed a violation

of the CSPA. In fact, the trial court noted that Bums did not even allege that Mr. Spitzer personally

committed violations of the CSPA; rather they alleged that there was no distinction between him and

the corporation and that he personally directed his dealerships to charge the dealer overhead fee.

(Ironically, this is an "alter-ego" argument that does require a Belvedere analysis.)

In reaching its' conclusion, the trial court relied on Charvat v. Farmers Ins. Columbus, Inc.,

supra, for the proposition that attempting to hold a corporate officer personally liable because of

9

10

ll

12

(1993), 67 Ohio St.3d 274, 287.

Id.

Id.

Id.

7

direct involvement in a business decision, without piercing the corporate veil, is an "end-run" of the

Belvedere holding.13 As such, the trial court granted Mr. Spitzer's motion for summary judgment and

dismissed all claims against him in his individual and personal capacity.

As noted, The appellate court disagreed and reversed the trial court resulting in this

discretionary appeal.

ARGUMENT IN SUPPORT OF PROPOSITION OF LAW

THE APPELLATE COURT ERRED AS A MATTER OF LAW WHEN ITREVERSED THE TRIAL COURT AND DETERMINED THAT THE CORPORATEVEIL NEED NOT BE PIERCED IN ORDER TO ESTABLISH INDIVIDUAL -DIRECTOR LIABILITY IN A C.S.P.A. CASE WHERE THERE IS NO ALLEGATIONTHAT THE DIRECTOR PERSONALLY COMMITTED THE ACTS COMPLAINED

OF

A. STANDARD OF REVIEW: DENOVO

The standard of review for an appeal from summary judgment is de novo. 14 An appellate

court is to apply the same test as the trial court, which is set forth in Civ. R. 56. Ohio Civil Rule

56(C) sets forth the standard governing motions for summary judgment.

In applying this standard, the Ohio Supreme Court has stated that summary judgment is

appropriate when the following factors exist:

1. there are no genuine issues of material fact;2. the moving party is entitled to judgment as a matter of law; and3. reasonable minds can come to but one conclusion and that conclusion is

adverse to the party against whom the motion for summary judgment is made.'s

13

14

15

Charvat v. Farmers Ins. Columbus, Inc. (2008), 178 Ohio App.3d 118.

Temple v. Wean United, Inc. (1977), 50 Ohio St.2d 317, 327.

State ex rel. Grady v. State Emp. Relations Bd. (1997), 78 Ohio St.3d 181, 183;see also, Temple v. Wean (1977), 50 Ohio St.2d 317, 327.

8

In the summary judgment context, a "material" fact is one that might affect the outcome of the

suit under the applicable substantive law.16

The party seeking summary judgment initially bears the burden of informing the trial court of

the basis for the motion and identifying portions of the record demonstrating an absence of genuine

issues of material fact as to the essential elements of the non-moving party's claims.l' The movant

must point to some evidence in the record of the type listed in Civ.R. 56(C) in support of its motion.

18

Furthermore, when a motion for summary judgment has been supported by proper evidence, the

non-moving party may not rest on the mere allegations and denials in the pleadings, but must set

forth specific facts, by affidavit or otherwise, that demonstrates the existence of a genuine triable

issue. 19 "Disputes over facts that might affect the outcome of the suit under the governing law will

properly preclude the entry of summary judgment." 20

"A motion for summary judgment forces the nonmoving party to produce evidence on any

issue for which the party bears the burden of production at trial." 21 Summary judgment is a

procedural device designed to expeditiously and economically dispose of legal claims which have no

16

17

18

19

20

21

Turner v. Turner (1993), 67 Ohio St.3d 337, 340.

Dresher v. Burt (1996), 75 Ohio St.3d 280, 293.

Id.

Jackson v. Alert Fire & Safety Equip., Inc. (1991), 58 Ohio St.3d 48, 52.

(Emphasis added).

Anderson v. Liberty Lobby, Inc. (1986), 477 U.S. 242, 247-48.

YVing v. Anchor Media Ltd. of Texas (1991), 59 Ohio St.3d 108, at 111.

9

factual foundation. 22 Summary judgment is grounded on the belief that litigation should be promptly

terminated when there is nothing to try. 23

B. A TRIAL COURT MUST REQUIRE THAT THE CORPORATE VEIL BE PIERCED

BEFORE AN INDIVIDUAL DIRECTOR MAY BE HELD PERSONALLY LIABLEFOR THE ACTS OF THE CORPORATION IN A C.S.P.A. CASE WHERE THEDIRECTOR DID NOT PERSONALLY COMMIT ANY OF THE ILLEGAL ACTS

ALLEGED

The issue before the court may also be framed as follows: in a CSPA case, can a director,

shareholder, or corporate officer be held individually liable for the commission of corporate acts

without an initial piercing of the corporate veil where there is no allegation that the director,

shareholder, or corporate officer personally committed the acts alleged?

The "veil" of the corporation can be "pierced" and individual shareholders or directors held

liable for corporate misdeeds when it would be unjust to allow the shareholders to hide behind the

fiction of the corporate entity.24 In other words, "a corporate entity will be disregarded where the

corporation is formedto evade a statute or where it is controlled and its affairs so conducted as to

make it merely an instrumentality for the purpose of evading or circumventing the law."25

A party who successfully pierces the corporate veil places personal liability on individual

shareholders or directors for the corporation's liabilities 26 The burden of proving the above by a

22

23

24

25

26

Paul v. Uniroyal Plastics (1988), 62 Ohio App.3d 277, 281, (citing Celotex Corp.

v. Catrett (1986), 477 U.S. 317, 327, 206 S.Ct. 2548, 2554-2555, 91 L. Ed.2d

265, 276.

Paul, at 281, (citing Norris v. Ohio Std. Oil Co. (1982), 70 Ohio St.2d 1, 2.

The State of Ohio ex rel. Petro v. Mercomp, Inc. (2006), 167 Ohio App.3d 64, 70.

State ex rel. Clelbrezze v. Specialized Finishers, Inc. (1991), 62 Ohio Misc.2d

516, citing State ex rel. Johnson & Higgins Co. v. Safford (1927), 117 Ohio St.

576.

Yo-Can, Inc. v. Yogurt Exchange, Inc. (2002), 149 Ohio App.3d 513, 526.

10

preponderance of the evidence is on the party seeking to pierce the corporate veil Z'

In the case at bar, the trial court ruled that a corporate piercing is necessary to attach personal

liability to a corporate shareholder, officer and/or director where there is no evidence of a personal

violation of the CSPA.

In Belvedere, this Court set forth the test for piercing the corporate veil in order to hold

individual shareholders liable for corporate misdeeds. Pursuant to Belvedere, corporate identity may

be disregarded only when: (1) control over the corporation by those to be held liable was so complete

that the corporation has no separate mind, will, or existence of its own, (2) control over the

corporation by those to be held liable was exercised in such a manner as to commit fraud or an illegal

act against the person seeking to disregard the corporate entity, and (3) injury or unjust loss resulted to

the Plaintiff from such control and wrong.28

The trial court found that the only evidence in this case to disregard the corporate fiction was

the fact that the finances of Spitzer are in a perilous condition due to the recent Chrysler bankruptcy

and reorganization. This evidence, however, did not demonstrate that Mr. Spitzer's control over

Spitzer Management was "so complete that the corporation had no separate mind."

The Appellate Court, on the other hand, although acknowledging Belvedere, utilized the

CSPA to impermissibly expand the scope of director, officer, and shareholder liability. The Appellate

Court opined that individual liability exists for actions where the officer took part in the commission

of the act, specifically directed the particular act to be done, or participated or cooperated therein.Z9

27

28

29

Byars v. Herman, 2004 WL 1532224 (Ohio App. 8 Dist.), decided July 8, 2004.

Belvedere, 67 Ohio St. 3d at 289.

Grayson v. Cadillac Builders, Inc., No. 68551, 1995 Ohio App. LEXIS 3954

(Ohio Ct. App. Sept. 14. 1995)

11

The Appellate Court further stated that the officer's liability flows not from his status as an

officer, but from his personal actions in violating the CSPA and that no corporate piercing is

necessary.30

The problem with this analysis, however, is that Mr. Spitzer did not personally engage in the

acts complained of, to wit: negotiating and charging the dealer overhead fee directly with consumers.

The Appellate Court was careful to note, however, that the CSPA does not change the existing

common law of tort, nor does it change the common law rule with respect to piercing the corporate

veil. It cited Grayson for the proposition that a corporate officer may not be held liable merely by his

status as a corporate officer. Rather, the CSPA creates a tort which imposes personal liability upon

corporate officers for violations of the act performed by them in their corporate capacities 3'

However, this reasoning is inapposite as it assumes facts not in evidence and allegations that

were not asserted. As noted, the only allegation against Mr. Spitzer is that he is a director and officer

of corporations that charged an illegal fee and that he ratified same. There is no allegation that he

personally charged the fee to any consumer; as such, the only path to personal liability was for Bums

to pierce the corporate veil, which she could not do.

Instead, the Court of Appeals based its reversal of the trial court's decision on Bums'

allegation that Mr. Spitzer directed his employees to charge a fee he knew violated the CSPA. The

court took note of Burns' allegation that Mr. Spitzer was put on notice through prior litigation that a

"dealer overhead" fee paid in addition to the advertised price of a car violated CSPA, but that he

nonetheless directed his employees to collect the fee.

30

31

Id.

Id.

12

The Appellate Court reasoned that if Mr. Spitzer directed employees of Spitzer to collect a fee

he knew was a violation of the CSPA, then he could be held individually liable. Moreover, the

Appellate Court determined that the corporate veil need not be pierced in order for a finding of

individual liability.

As noted, however, the Appellate Court's reasoning is flawed.

Pursuant to Belvedere, a corporate officer may be held personally liable for corporate acts only

if the plaintiff can meet the elements necessary to pierce the corporate veil, notwithstanding the type

of case or claim alleged.

Alternatively, if a plaintiff can demonstrate a corporate officer's personal and/or direct

violation of the CSPA, then individual liability may attach regardless of whether the corporate veil is

pierced.

Put another way, there are two paths to individual liability in a CSPA case: 1) pierce the

corporate veil; or 2) demonstrate that the corporate director, officer, or shareholder directly committed

the acts alleged 32 In the case at bar, the Eighth Court of Appeals has created a new, improvident third

method; simply allege that a director, officer, or shareholder participated in the decision to commit the

act, and individual liability will attach.

To that end, the interpretation of personal liability under the CSPA as determined by the

Eighth District eviscerates the necessity of piercing the corporate veil and the long-standing doctrine

of Belvedere and obviates the requirement to allege and prove personal involvement in committing or

participating in the actual illegal acts.

Here, the trial court was correct in determining that the corporate veil could not be pierced so

as to hold Mr. Spitzer individually liable regardless of the fact that this is a CSPA case as he did not

personally commit any of the acts that violated the CSPA.

32 State ex rel. Fisher, and its progeny.

13

Based on the doctrine of piercing the corporate veil, there is no justifiable basis to hold Mr.

Spitzer personally liable for the acts of these corporations and there is simply no evidence that he

personal committed violations of the act.

As such, the traditional doctrine of piercing the corporate veil, a long-standing prerequisite to

personal liability for corporate misdeeds, must remain the law of the land, even in a CSPA case.

Alternately, in order to attach personal liability in a CSPA case, regardless of corporate insulation, the

Plaintiff must at a minimum allege, and ultimately demonstrate, that the corporate officer personally

committed the acts complained of. In the case herein, Bums failed at both.

If left unchanged, this decision significantly and materially weakens corporate protections for

directors, officers, and shareholders that they have enjoyed since the creation of the corporate entity as

it provides for personal liability to attach without piercing the corporate veil or alleging actual

participation in committing the violations.

For the foregoing reasons this matter is of great public importance and/or interest and the court

should accept it for review.

14

CONCLUSION

For the reasons discussed above, this case involves matters of public and great general interest

and Defendant/Appellee, Alan Spitzer, respectfully requests this Honorable Court accept jurisdiction

in this case so that the important issues presented herein will be reviewed on the merits.

Respectfully submitted,

GIARDINI, COOK & NICOL, LLC

D. Cft'I2IS COOK%#0061073The Commons520 Broadway, Third FloorLorain, OH 44052PH: (440) 246-2665FX: (440) 246-2670email: cooklawncent el.netAttorney for Defendant/Appellee,Alan Spitzer

CERTIFICATE OF SERVICE

I certify that a copy of this Memorandum in Support of Jurisdiction was sent via regular U.S.'7Zg

Mail to the following on the ^day of December, 2010:

Ronald Frederick, Esq.RONALD FREDERICK & ASSOC. CO., L.P.A.55 Public Square, Suite 1300Cleveland, OH 44113-1971Attorney for Plaintiffs/Cross-Appellants

D. CHRIS eOOKAttomey for Defendant/Appellee,Alan Spitzer

15

APPENDIX

16

61577026

IN THE COURT OF COMMON PLEASCUYAHOGA COUNTY, OHIO

DONNA BURNS ET AL I Case No: CV-06-606666Plaintiff

Judge: CAROLYN B FRIEDLAND

SPTTZER 1vIANAGEIviENT INC. ET ALDefendant

JOURNAL ENTRY

89 DIS. W/ PREJ - PARTIAL

PENDING BEFORE THE COURT IS A MOTION FOR SUMMARY JUDGMENT DEEMED FILED ON 07/20/2007 BYDEFENDANT ALAN SPITZER. MR. SPITZER IS SEEKING DISMISSAL OF ALL CLAIMS ASSERTED AGAINST HIM IN HISINDIVIDUAL AND PERSONAL CAPACITY. IN SUPPORT OF THIS MOTION, MR. SPITZER ARGUES THAT THEEVIDENCE IN THE RECORD DEMONSTRATES THAT PLAINTIFF IS UNABLE TO MEET ITS BURDEN OFESTABLISHING HIS PERSONAL LIABII.ITY. MR. SPITZER ARGUES THAT IN ORDER FOR PERSONAL LIABILITY TOATTACH, THE PLAINTIFFS MUST FIRST PIERCE THE CORPORATE VEIL.

WTTH RESPECT TO CORPORATE SHAREHOLDER, OFFICER, AND DIRECTOR LIABILITY, THE OHIO SUPREME COURTSTATED, "[A]FUNDAMENTAL RULE OF CORPORATE LAW IS THAT, NORMALLY, SHAREHOLDERS, OFFICERS, ANDDIRECTORS ARE NOT LIABLE FOR THE DEBTS OF THE CORPORATION." BELVEDERE CONDOMINIUMS UNITOWNER'S ASSN V. R.E. ROARK COS. (1993), 67 OHIO ST.3D 274, 287. HOWEVER, AN EXCEPTION TO THE GENERALRULE EXISTS, WHERE "THE 'VEIL' OF THE CORPORATION CAN BE PIERCED' AND INDIVIDUAL SHAREHOLDERSHELD LIABLE FOR CORPORATE MISDEEDS WHEN IT WOULD BE UNJUST TO ALLOW THE SHAREHOLDERS TOHIDE BEHIND THE FICTION OF THE CORPORATE ENTITY." ID. THUS, "[C]OURTS WILL PERMIT INDIVIDUALSHAREHOLDER LIABILITY ONLY IF THE SHAREHOLDER IS INDISTINGUISHABLE FROM OR THE "ALTER EGO" OFTHE CORPORATION ITSELF." ID.

THE CORPORATE FORM MAY BE DISREGARDED AND INDIVIDUAL SHAREHOLDERS HELD LIABLE FORCORPORATE MISDEEDS WHEN (1) CONTROL OVER THE CORPORATION BY THOSE TO BE HELD LIABLE WAS SOCOMPLETE THAT THE CORPORATION HAS NO SEPARATE MIND, WILL, OR EXISTENCE OF ITS OWN, (2) CONTROLOVER THE CORPORATION BY THOSE TO BE HELD LIABLE WAS EXERCISED IN SUCH A MANNER AS TO COMMITFRAUD OR AN ILLEGAL ACT AGAINST THE PERSON SEEKING TO DISREGARD THE CORPORATE ENTITY, AND (3)INJURY OR UNJUST LOSS RESULTED TO THE PLAINT'IFF FROM SUCH CONTROL AND WRONG. ID., AT 289. IN THISCASE, THE ONLY EVIDENCE OFFERED BY THE PLAINTIFF TO DISREGARD THE CORPORATE FICTION IS THE FACTTHAT THE FINANCES OF SPITZER MANAGEMENT ARE IN PERILOUS POSITION GIVEN THE EVENTS SURROUNDINGTHE CHRYSLER BANKRUPTCY AND REORGANIZATION. TI-IIS "EVIDENCE" DOES NOT DEMONSTRATE THAT MR.SPITZER'S CONTROL OF SPITZER MANAGEMENT WAS "SO COMPLETE THAT THE CORPORATION HAS NOSEPARATE MIND."

IN ADDITTON, PLAINTIFFS ARGUMENT THAT THEY NEED NOT PIERCE THE CORPORATE VEIL TO ATTACHPERSONAL LLABILITY UNDER CSPA CASES IS WITHOUT ANY MERIT BECAUSE THERE IS NO EVIDENCE THAT MR.SPITZER PERSONALLY COMMITTED A VIOLATION OF THE CSPA. IF THAT WERE THE CASE, MR. SPTTZER WOULDBE PERSONALLY LIABLE WITHOUT HAVING TO PIERCE THE CORPORATE VEIL. SEE, INSERRA V. J.E.M. BLDG.CORP. (NOV. 22, 2000), 9TH APP. DIST. NO. 2937-M, 2000 WL 1729480, *5. HOWEVER, TE PLAINTIFFS DID NOTALLEGE THAT MR. SPITZER PERSONALLY COMMITTED VIOLATIONS OF THE CSPA. THEY ALLEGED THAT THEREWAS NO DISTINCTION BETWEEN MR. SPITZER AND THE CORPORATION, AND THAT HE PERSONALLY DIRECTEDHIS DEALERSHIPS TO CHARGE THE DEALER OVERHEAD. IN CHARVAT V. FARMERS INS. COLUMBUS, INC. (2008),178 OHIO APP.3D 118, THE PLAINTIFF SOUGHT TO HOLD A CORPORATE OFFICER PERSONALLY LIABLE BECAUSEOF, AMONG OTHER THINGS, HIS DIRECT INVOLVEMENT IN THE BUSINESS. THE PLAINTIFF ARGUED THAT HE DID

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HAVE TO PIERCE THE CORPORATE VEIL TO HOLD THE OFFICER PERSONALLY LIABLE. THE APPEALS COURTREJECTED THAT ARGUMENT AND STATED THAT WHAT THE PLAINTIFF WAS ATTEMPTING TO DO BY HOLDINGTHE OFFICER PERSONALLY LIABLE WAS A RUN-AROUND OF THE BELVEDERE HOLDING.

ACCORDINGLY, DEFENDANT ALAN SPITZER'S MOTION FOR SUMMARY JUDGMENT IS GRANTED, AND ALLCLAIMS ASSERTED AGAINST HIM IN HIS INDIVIDUAL AND PERSONAL CAPACITY ARE DISMISSED WITHPREJUDICE. PURSUANT TO OI3IO CIV. R. 54(B), THE COURT FINDS THAT THERE IS NO JUST CAUSE FOR DELAY.

Judge Siffnahue Datea', -

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' Court of ZIppeo.W of ®bioEIGHTH APPELLATE DISTRICT

COUNTY OF CUYAHOGA

JOURNAL ENTRY AND OPINIONNo. 94700

DONNA BURNS, ET AL.

PLAINTIFFS-APPELLEES/CROSS-APPELI.ANTS

vs.

0SPITZER MANAGEMENT, INC., ET AL.

DEFENDANTS-APPELLANTS/CROSS-APPELLEES

JUDGMENT:AFFIRMED IN PART, REVERSED IN

PART, AND REMANDED

Civil Appeal from theCuyahoga County Court of Common Pleas

Case No. CV-606666

BEFORE: Celebrezze, J., Blackmon, P.J., and Dyke, J.

0RELEASED AND JOURNALIZED: November 4, 2010

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ATTORNEY FOR APPELLANTS/CROSS-APPELLEES

D. Chris CookGiardini, Cook & Nicol, L.L.C.The Commons520 Broadway, Third Floor

Lorain, Ohio 44052

ATTORNEY FOR APPELLEES/CROSS-APPELLANTS

Ronald I. FrederickRonald Frederick & Associates Co., L.P.A.

55 Public SquareSuite 1300Cleveland, Ohio 44113

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rPLLD AND JOURNALIZE uPER APP.R, 22(C)

42010

R D E FUE .^TCLER HEPPEALS4Y-- DEP.

0 FRANK D. CELEBREZZE, JR., J.:

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Defendants-appellants/cross-appellees, Spitzer Management, Inc., Spitzer

Buick-Cadillac, Inc., and Alan Spitzer (collectively "Spitzer"), appeal from an

order granting the motion for class certification of plaintiffs-appellees/cross-

appellants, Donna Burns and Marion McCloud ("appellees"). Appellees appeal

the trial court's grant of summary judgment in favor of Alan Spitzer in his

individual capacity and claim that Spitzer collected fees from consumers in sales

and lease transactions in violation of the Consumer Sales Practices Act

("CSPA"). After a thorough review of the record and case law, we affirm the trial

court's certification of the class, but reverse summary judgment in favor of Alan

Spitzer and remand.

The CSPA, codified in R.C. Chapter 1345. et seq. with regulations

contained in Ohio Adm. Code 109:4, protects consumers engaged in certain

transactions, including the purchase or lease of automobiles. Ohio Adm. Code

109:4-3-16(B)(21) ensures that a car dealer's advertised price is the actual price

of the car. This regulation specifically limits the fees that may be charged by a

dealer so that consumers are informed of the actual price charged when

comparison shopping.

Appellees assert that Spitzer violated the CSPA by collecting a "dealer

overhead" fee in many of its consumer transactions. Appellees claim that they

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were charged $197.50, identified as a "dealer overhead" fee, in addition to the

price of the car each purchased. Appellees brought suit on November 9, 2006 for

these alleged violations, claiming fraud, civil conspiracy, and punitive damages,

and seeking class status. Alan Spitzer, in his individual capacity, filed for

summary judgment asserting that appellees had not alleged facts that would

permit them to pierce the corporate veil.' On February 5, 2010, the trial court

granted summary judgment in favor of Alan Spitzer. The trial court also

granted class certification on the same date.. The parties then filed their

respective appeals, each raising a single assignment of error.

Law and Analysis

Class Certification

Spitzer argues that appellees fail to meet any of the requirements for class

certification. In Baughman v. State Farm Mut. Auto. Ins. Co., 88 Ohio St.3d 480,

2000-Ohio-397, 727 N.E.2d 1265, the Ohio Supreme Court reaffirmed that the

standard of review to be applied for class action certification is that of an abuse

of discretion. A trial court possesses broad discretion in determining whether

1"Under this exception [to corporate immunity for shareholders, officers, anddirectors], the'veil' of the corporation can be 'pierced' and individual shareholders heldliable for corporate misdeeds when it would be unjust to allow the shareholders to hide

behind the fiction of the corporate entity." Belvedere Condominiu,m Unit Owners'Assn.

v. R.E. Roark Cos., Inc., 67 Ohio St.3d 274, 287, 1993-Ohio-119, 617 N.E.2d 1075.

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a class action may be maintained. That determination will not be disturbed

absent a showing that the discretion was abused. Id. An abuse of discretion

implies that the trial court's attitude was unreasonable, arbitrary, or

unconscionable. Beder v. Cleveland Browns, Inc. (1998), 129 Ohio App.3d 188,

717 N.E.2d 716. The trial court's decision regarding the certification of a class

should not be reversed on appeal because the appellate judges would have

decided the issue differently had the initial determination been in their hands.

Hamilton v. Ohio Sav. Bank, 82 Ohio St.3d 67, 1998-Ohio-365, 694 N.E.2d 442.

The class action is an invention of equity. Its purpose is to facilitate

adjudication of disputes involving common issues between multiple parties in a

single action. Planned Parenthood Assn. of Cincinnati, Inc. v. Project Jericho

(1990), 52 Ohio St.3d 56, 62, 556 N.E.2d 157. The plaintiff bears the burden of

establishing the right to a class action. Shaver v. Standard Oil Co. (1990), 68

Ohio App.3d 783, 589 N.E.2d 1348. Class certification in Ohio is based on Rule

23 of the Ohio Rules of Civil Procedure, which is identical to Rule 23 of the

Federal Rules of Civil Procedure.

In Warner u. Waste Mgt., Inc. (1988), 36 Ohio St.3d 91, 521 N.E.2d 1091,

the Ohio Supreme Court set forth seven elements for a class to be certified. In

determining whether a class action is properly certified, the first step is to

ascertain whether the threshold requirements of Civ.R. 23(A) have been met.

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Once those requirements are established, the trial court must turn to Civ.R.

23(B) to discern whether the purported class comports with the factors specified

therein. Accordingly, before a class may be certified as a class action, a trial

court must make seven affirmative findings. Warner at paragraph one of the

syllabus.

Four prerequisites are explicitly set forth in Civ.R. 23, while two

prerequisites are implicit in the rule. Id. The two implicit prerequisites are (1)

that the class must be identifiable and unambiguously defined and (2) that the

class representatives must be members of the class. Id. at 96.

The four delineated prerequisites in Civ.R. 23(A) include the following:

"(1) the class is so numerous that joinder of all members is impracticable, (2)

there are questions of law or fact common to the class, (3) the claims or defenses

of the representative parties are typical of the claims and defenses of the class,

and (4) the representative parties will fairly and adequately protect the interests

of the class." Id. at 97, quoting Civ.R. 23(A).

Finally, the trial court must also find that one of the three Civ.R. 23(B)

requirements is met before the class may be certified. Id. at 94; see, also,

Hamilton v. Ohio Sau. Bank, supra. If the class movant fails to meet one of

these requirements, class certification must be denied.

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Civ.R. 23(B)(3) requires that the questions of law or fact to the members

of the class predominate over any questions affecting individual members. As

stated in Hamilton, "Civ.R. 23(B)(3) provides that an action may be maintained

as a class action if, in addition to the prerequisites of subdivision (A), 'the court

finds that the questions of law or fact common to the members of the class

predominate over any questions affecting only individual members, and that a

class action is superior to other available methods for the fair and efficient

adjudication of the controversy."' Id. at 79.

The matters pertinent to the findings include: (a) the interest of members

of the class and individually in controlling the prosecution of defense of separate

actions; (b) the extent and nature of any litigation concerning the controversy

already commenced by or against members of the class; (c) the desirability or

undesirability of concentrating the litigation of the claims in a particular forum;

and (d) the difficulties likely encountered in the management of the class action.

In order to satisfy the predominance requirement, the appellant must

show that the common questions of law and fact represent a significant aspect

of the class and are capable of resolution for all members of the class in a single

adjudication. Shaver v. Standard Oil Co. at 799. The mere assertion that

common issues of law or fact predominate does not satisfy the express

requirements under the rule. In Waldo v. N. Am. Van Lines, Inc. (W.D. Pa.

0

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1984), 102 F.R.D. 807, the court stated: "[It] is not simply a matter of numbering

the questions in the case, labelling [sic] them as common or diverse, and then

counting up. It involves a sophisticated and necessarily judgmental appraisal

of the future course of the litigation ***."

Where the circumstances of each proposed class member need to be

analyzed to prove the elements of the claim or defense, then individual issues

would predominate and class certification would be inappropriate. Schmidt v.

Avco Corp. (1984), 15 Ohio St.3d 310, 314, 473 N.E.2d 822.

The class definition proposed by appellees states:

"All consumers who, between December 1, 2004, and the present, have

purchased or leased new or used vehicles from Spitzer * * * and have been

charged, in conjunction with such a lease or purchase, a fee for `dealer overhead'

in excess of sales tax and document and title fees, and any other fee permitted

under Ohio law to be charged to a consumer in a motor vehicle sale or lease

transaction." (Emphasis added.)

This definition limits the class to all consumers who were allegedly

charged a fee in violation of the CSPA. These individuals would have actually

suffered damages if they were charged a fee in contravention of the CSPA. The

CSPA prohibits a car dealer from advertising "any price for a motor vehicle

unless such price includes all costs to the consumer except tax, title and

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registration fees, and a documentary service charge, provided such charge does

not exceed the maximum documentary service charge permitted to be charged

pursuant to seciion 1317.07 of the Revised Code. Additionally, a dealer may

advertise a price that includes a deduction for a discount or rebate that all

consumers qualify for, provided that such advertisement clearly discloses the

deduction of such discount or rebate." Ohio Adm. Code 109:4-3-16(B)(21).

Appellees have met all the requirements of Civ.R. 23. Similar questions

were raised regarding the propriety of class certification in Washington v.

SpitzerMgt., Inc., Cuyahoga App. No. 81612, 2003-Ohio-1735, where this court

found class certification was proper. Spitzer attempts to distinguish the present

case from Washington by alleging that a negotiated fee differs from a fee charged

on each transaction in a preprinted contract that was not negotiable. The only

difference between Washington and the present case is that the contract used by

Spitzer in Washington contained a preprinted item charging a "dealer overhead"

fee of $97.50. Here "dealer overhead" was preprinted on the contract form, but

the amount of this fee, which ranged from $10 to over $900, was written in and

negotiated between the parties. This is a distinction without a difference.

Appellants argue that because the price was negotiated, consumers were

not misled and no violation occurred. This argument contravenes the basic

remedial purpose of the CSPA, which is the development of fair consumer sales

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practices including the ability to accurately compare prices when shopping for

a vehicle. Charlie's Dodge, Inc. v. Celebrezze (1991), 72 Ohio App.3d 744, 747,

596 N.E.2d 486. That the price is negotiable once the consumer is in the high-

pressure sales room of a car dealership does not accomplish this purpose.

The regulations promulgated to delineate what a car dealer may do when

advertising cars clearly set forth the fees that may be charged in addition to the

advertised price. Ohio Adm. Code 109:4-3-16(B)(21). Those fees include a

document preparation fee, tax, and title. Plaintiff McCloud's sales contract,

included in the record, shows a listed price for the car followed by various fees,

including tax, title, document preparation, and "dealer overhead." This fee

appears to be charged in addition to the price of the car. There is a colorable

claim common to all proposed class members, namely that they were charged a

fee in violation of the CSPA.

The proposed class is also readily identifiable. Again, it consists of all

consumers who were charged a fee in violation of the CSPA. There are

numerous similarly situated individuals who were charged this "dealer

overhead" fee during the period specified in the class. Appellees estimate the

class to include some 10,000 members.

Commonality is also not an issue here. Spitzer argues that because each

fee was negotiated, a common nucleus of operative facts or common liability

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issue does not exist in this case. Simply because the fees charged differ between

class members does not give rise to a divergence of issues. The damages may be

different between class members, but the alleged wrongdoing is the same.

Typicality is also met in this case. The proposed class members are

similarly situated to the rest of the class as consumers who leased or purchased

vehicles from Spitzer and were charged a "dealer overhead" fee. The fact that

negotiations between class members may have differed in relation to the fees

does not lead to the conclusion that the proposed class representatives cannot

meet the typicality requirement. Likewise, McCloud and Burns adequately

represent the interests of the purported class.

Finally, Spitzer argues that the elements of Civ.R. 23(B) cannot be met

because questions affecting individual class members predominate and a class

action would deprive class members of certain remedies available to them

individually.

Again, individual negotiations of a fee, which appellees claim were paid in

violation of the CSPA, do not raise a significant question uncommon to all

members. This court, in Washington, found that a class action was the superior

method to resolve this dispute, and the instant case presents almost the exact

situation. Id. at ¶52. The amount of the fee charged may differ between class

members, but that is an issue that can be addressed when awarding damages

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and is easily ascertainable from Spitzer's business records. SeeVinci v. Am. Can

Co. (1984), 9 Ohio St.3d 98, 102, 459 N.E.2d 507.

The trial court did not abuse its discretion in granting appellees' motion

for class certification. This case presents a substantially similar situation as

that previously addressed in Washington. The same result is therefore

warranted.

Cross-appeal

Individual Liability of a Corporate Officer

Appellees bring an appeal of the trial court's grant of summary judgment

in favor of Alan Spitzer individually, dismissing him from the suit. Appellees

allege that Alan Spitzer, president and corporate director of the Spitzer entities,

directed employees to charge a fee he knew violated the CSPA.

"Civ.R. 56(C) specifically provides that before summary judgment may be

granted, it must be determined that: (1) No genuine issue as to any material fact

remains to be litigated; (2) the moving party is entitled to judgment as a matter

of law; and (3) it appears from the evidence that reasonable minds can come to

but one conclusion, and viewing such evidence most strongly in favor of the party

against whom the motion for summary judgment is made, that conclusion is

adverse to that party:' . Temple v. Wean United, Inc. (1977), 50 Ohio St.2d 317,

327, 364 N.E.2d 267.

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It is well established that the party seeking summary judgment bears the

burden of demonstrating that no issues of material fact exist for trial. Celotex

Corp. v. C¢trett (1986), 477 U.S. 317, 330, 106 S.Ct. 2548,91 L.Ed.2d 265; Mitseff

v. Wheeler (1988), 38 Ohio St.3d 112, 115, 526 N.E.2d 798. In Dresher v. Burt,

75 Ohio St.3d 280, 1996-Ohio-107, 662 N.E.2d 264, the Ohio Supreme Court

modified and/or clarified the summary judgment standard as applied in Wing v.

Anchor Media, Ltd. of Texas (1991), 59 Ohio St.3d 108, 570 N.E.2d 1095. Under

Dresher, "the moving party bears the initial responsibility of informing the trial

court of the basis for the motion, and identifying those portions of the record

which demonstrate the absence of a genuine issue of fact on a material element

of the nonmoving party's claim." (Emphasis sic.) Id. at 296. The nonmoving

party has a reciprocal burden of specificity and cannot rest on mere allegations

or denials in the pleadings. Id. at 293. The nonmoving party must set forth

"specific facts" by the means listed in Civ.R. 56(C) showing a genuine issue for

trial exists. Id.

This court reviews the lower court's granting of summary judgment de

novo. Brown v. Scioto Bd. of Cty. Commrs. (1993), 87 Ohio App.3d 704, 622

N.E.2d 1153. An appellate court reviewing the grant of summary judgment

must follow the standards set forth in Civ.R. 56(C). "The reviewing court

evaluates the record * * * in a light most favorable to the nonmoving party. * * *

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[TJhe motion must be overruled if reasonable minds could find for the party

opposing the motion." Saunders v. McFaul (1990), 71 Ohio App.3d 46, 50, 593

N.E.2d 24.

In the present case, appellees argue that Alan Spitzer was put on notice,

through significant prior litigation,2 that a "dealer overhead" fee paid in addition

to the advertised price of a car was a violation of the CSPA, but that he

continued to direct his employees to collect the fee and even increased the fee by

roughly $100 from the fee charged in Washington.

Generally, a corporate officer is not individually liable for actions taken in

the name of the corporation. However, "the corporate form may be disregarded

and individual shareholders held liable for corporate misdeeds when (1) control

over the corporation by those to be held liable was so complete that the

corporation has no separate mind, will, or existence of its own, (2) control over

the corporation by those to be held liable was exercised in such a manner as to

commit fraud or an illegal act against the person seeking to disregard the

corporate entity, and (3) injury or unjust loss resulted to the plaintiff from such

control and wrong." Belvedere Condominium Unit Owners'Assn. v. R.E. Roark

Cos., 67 Ohio St.3d 274, 289, 1993-Ohio-119, 617 N.E.2d 1075.

2Appellees cite to a history of litigation stretching as far back as 1960 allegingthat Spitzer entities charged illicit fees, the most recent of which was Washington,

which resulted in a settlement.

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Under the CSPA, corporate officers can be "dealers" within the meaning

of Ohio Adm. Code 109:4-3-16(A)(1), and an officer of a corporation is

individually liable for each violation of the CSPA in which he personally

participates. Stultz v. Artistic Pools, Inc., Summit App. No. C.A. 20189,

2001-Ohio-1420, 4. Liability also exists for actions where "the officer took part

in the commission of the act, specifically directed the particular act to be done,

or participated or cooperated therein." Grayson u. Cadillac Builders, Inc. (Sept.

14, 1995), Cuyahoga App. No. 68551, citing State ex rel. Fisher v. Am. Courts,

Inc. (July 21, 1994), Cuyahoga App. No. 65939. The officer's "liability flows not

from his status as *** an officer ***, but from his personal actions in violating

CSPA" I

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nserra u. J.E.M. Bldg. Corp. (Nov. 22, 2000), Medina App. No. 2973-M,

at 11, citing Sovel v. Richardson (Nov. 15, 1995), Summit App. No. 17150. This

court noted that the CSPA "does not change the existing common law of tort, nor

does it change the common law rule with respect to piercing the corporate veil.

A corporate officer may not be held liable merely by virtue of his status as a

corporate officer. It does, however, create a tort which imposes personal liability

upon corporate officers for violations of the act performed by them in their

corporate capacities." Grayson at fn. 1.

Here, appellees have alleged that Alan Spitzer directed his employees to

charge a fee he knew to be in violation of the CSPA. Alan Spitzer signed prior

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settlement agreements in Washington and other cases that dealt with the

legality of such a fee. The trial court found that appellees had not alleged facts

that would allow them to pierce the corporate veil. That is not required in order

to hold Alan Spitzer individually liable in this case. If Alan Spitzer directed

employees of Spitzer to collect a fee he knew was a violation of the CSPA, as

appellees allege and Alan Spitzer's deposition testimony tends to support, then

he can be held individually liable. During his deposition, Alan Spitzer admitted

that he was aware of a memo authored by a Spitzer employee stating that

charging the "dealer overhead" fee in addition to the advertised price of cars

would be a violation of the CSPA. Alan Spitzer also admitted to having veto

power over decisions made within the businesses. Therefore, according to

Grayson, Alan Spitzer may be individually liable if appellees are able to prove

these allegations at trial.

At this point in the litigation, a material question of fact exists as to

whether Alan Spitzer knowingly directed Spitzer employees to collect a fee from

consumers that violated the CSPA. Therefore the trial court's grant of summary

judgment in Alan Spitzer's favor is reversed.

Conclusion

The trial court did not err in granting appellees' class certification motion.

Appellees met all the requirements of Civ.R. 23. However, the trial court did err

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in granting summary judgment in favor of Alan Spitzer because appellees are

not required to pierce the corporate veil to hold Alan Spitzer individually liable;

he need only to have personally directed Spitzer employees to collect the fee in

violation of the CSPA. On this issue, a material question of fact remains.

This cause is affirmed in part, reversed in part, and remanded to the lower

court for further proceedings consistent with this opinion.

It is ordered that appellants and appellees share the costs herein taxed.

The Court finds there were reasonable grounds for this appeal.

It is ordered that a special mandate issue out of this court directing the

common pleas court to carry this judgment into execution.

A certified copy of this entry shall constitute the mandate pursuant to

Rule 27 of the Rules of Appellate Procedure.

(.r

F$ANK D. CUEBF^^EZZE, JR., JUDGE

PATRICIA ANN B 6LACKMON, P.J., andANN DYKE, J., CONCUR

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